Your comment reminds me of my own personal frustration with our governance and current economy.
I have a modest sum of money in various forms. The central bank in the US is basically said to me, "stop saving!" because interest rates are so low and inflation is likely to be high in the future -- there's no point. Saving is out. (You think we would have learned something...)
So, let's look at possible investments. Real-estate? Maybe, but investment requirements for real-estate have gone up dramatically. In fact, I was recently told that if you're self-employed (aka creating jobs) for less than several years and looking for an investment property mortgage that you'll need to put down 50% to invest in property. So, I could find property to buy outright, but it seems that wouldn't being taking advantage of any real leverage.
Stocks? Sure, I have some stocks, but I'm not going to put all of my eggs in that basket after seeing 15 years of market swings and no real growth. (Sorry John Bogle, you may be wrong after all.)
So, I would like to put this money to work in some small way, but I have yet to see a way to actually do that (other than by starting a business, which is exactly what I did, but I'd like some diversity obviously). It makes you realize why more arcane investments like gold and bitcoin and startups are all very volatile, people are looking for something anything to invest in.
Fixing this stalemate is hard, but the government needs to find a way if they want money to come out from under the mattress and become productive again.
Leverage is a returns multiplier. You might make 5-10% return on Real Estate, but add borrowing and you can increase the returns dramatically. As long as the returns are better than the cost of the borrowed money, everyone wins. If it doesn't, he loses because leverage works both ways. Leverage is vitally important in making money, whether it is through getting other people to work for you, or getting other peoples money to work for you. Any serious entrepreneur should have a deep understanding of the uses of leverage.
The problem is that artificial manipulation of the price of money (interest rates) gives a false signal for people to invest in an asset class, like real estate, because it artificially inflates returns. Real Estate investing contains many risks (the largest is lack of liquidity), so it doesn't make sense to invest large sums for a small return.
I have a modest sum of money in various forms. The central bank in the US is basically said to me, "stop saving!" because interest rates are so low and inflation is likely to be high in the future -- there's no point. Saving is out. (You think we would have learned something...)
So, let's look at possible investments. Real-estate? Maybe, but investment requirements for real-estate have gone up dramatically. In fact, I was recently told that if you're self-employed (aka creating jobs) for less than several years and looking for an investment property mortgage that you'll need to put down 50% to invest in property. So, I could find property to buy outright, but it seems that wouldn't being taking advantage of any real leverage.
Stocks? Sure, I have some stocks, but I'm not going to put all of my eggs in that basket after seeing 15 years of market swings and no real growth. (Sorry John Bogle, you may be wrong after all.)
So, I would like to put this money to work in some small way, but I have yet to see a way to actually do that (other than by starting a business, which is exactly what I did, but I'd like some diversity obviously). It makes you realize why more arcane investments like gold and bitcoin and startups are all very volatile, people are looking for something anything to invest in.
Fixing this stalemate is hard, but the government needs to find a way if they want money to come out from under the mattress and become productive again.